Del Monte vs. Del Monte: What makes fruit fresh?

04/06/2012 12:00:44 PM
Tom Karst

Jurors have decided in favor of Del Monte Fresh in this case, agreeing that Del Monte Foods fraudently advertised processed fruit as fresh. Jurors: Del Monte Foods' fresh fruit claims fraudenlent

Seeking to find the line between fresh-cut produce and refrigerated fruit in a jar, jurors in New York are settling a long dispute between San Francisco-based Del Monte Food Co. and Coral Gables, Fla.-based Fresh Del Monte Produce Inc.

Prior to 1989, Del Monte Foods — then a subsidiary of RJR Nabisco Inc. — consisted of both a processed foods operations and a fresh division. The fresh fruit operations of the Del Monte business were sold to Polly Peck International late in 1989 and ultimately became known as Fresh Del Monte Produce Inc.

With the sale, the owners of the Del Monte fresh operations were granted perpetual, royalty-free rights and license to use the Del Monte brand in connection with the production, manufacture and sale of “fresh fruit, fresh vegetables and fresh produce.”

At the same time, Del Monte Foods retained the right to use the Del Monte brand and marks on the sale of any processed food, or goods other than “fresh fruit, fresh vegetables and fresh produce.”

It is the dispute over what constitutes “fresh” and “processed” that lie at the heart of the case. A dispute rose in the late 1990s over the scope of Fresh Del Monte’s rights under the license agreement. In 1999, a judge ruled that Fresh Del Monte’s exclusive rights included the right to sell fresh-cut fruit.

In 2008, Fresh Del Monte Produce asked asked a federal district court in New York to stop Del Monte Foods from advertising refrigerated cut fruit products under the “Fruit Naturals,” “SunFresh,” “Orchard Select” and “Superfruit” names. The lawsuit claims false advertising and that Del Monte Foods was competing with Fresh Del Monte on its turf in the produce department.

The ads appeared in The Packer and other trade publications, and Del Monte Foods exhibited the products at the Produce Marketing Association’s Fresh Summit.

In court documents, lawyers for Del Monte Food Co. called Fresh Del Monte’s effort to restrict the marketing of refrigerated processed cut-fruit products “a classic case of sour grapes,” prompted by erosion of market share to Del Monte Foods. Lawyers for the company said consumers know the refrigerated jarred fruit products are processed, since they contain liquid and have a nutrition label.

The jury trial related to the 2008 legal action began March 27 and deliberations started April 5, according to Arturo Gonzalez, legal counsel for Del Monte Foods Co, He said jurors asked to see all of the products in question from both companies during their deliberations.

“We feel good about how all the evidence came in, but with a jury you never can tell,” Gonzalez said April 5.

Lauren Aguiar, legal counsel for Fresh Del Monte Produce Inc., said in an e-mail that the company has no comment on pending litigation.

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While the battles between Del Monte Foods and Del Monte Fresh over the use of the brand on fresh cut fruit have been raging since 1997, its nice to finally see the common sense jury ruling in favor of Del Monte Fresh. First of all, Del Monte Foods' moves from a pure marketing standpoint were brilliant. Claiming the need to refrigerate cooked and pasteurized fruit and citrus laden with preservatives like pottasium sorbate and sodium benzoate clearly implies to the uninformed consumer that the products are truly "fresh". After all, they must be fresh because they are being displayed in the refrigerated section of the produce department [sic]. This raises the culpability issue of the retailers for their parts in choosing to merchandise these products as fresh when in fact they clearly aren't.